Feckless & Reckless in Washington, District of Columbia

The Boss is a Brennan on his Mother’s side so we all celebrate Saint Patrick’s Day — green beer and all.

So The Boss was chatting with one of his more seasoned friends about the state of affairs in Washington and they both concluded that there must be something in the water in Washington.

The current absurdities

In Washington today there seems to be some confusion as to whether America has a fiscal crisis at hand or not. What do you think?

Well, as a starting point the Big Red Car sees the following absurdities:

1. Nobody in Washington is committed to the basic financial principle of balancing revenues and expenditures. The notion of balancing the budget — a principle that every State governor and legislature deals with routinely — is a quaint and irrelevant consideration. Republicans and Democrats alike.

[pullquote]The notion of balancing the budget — a principle that every State governor and legislature deals with routinely — is a quaint and irrelevant consideration.[/pullquote]

2. The President does not think that we have a spending problem or a deficit problem or any real necessity to even work the quaint notion of a balanced budget into the conversation.

3. The President does not intend to cut anything and he certainly does not intend to cut entitlements. He was able to pass over $600B in increased revenues — TAXES — in return for $0 in cuts and yet he preaches a balanced approach.

4. Nobody — nobody — is contemplating actually cutting anything. The most courageous amongst this bunch is only talking about cutting the rate of increase in spending which is baked into every proposed budget already. It is a given that each and every year will require an increase in spending.

5. Everyone preaches the notion of “cutting waste and spending” but after years and years no such cuts have ever been made. Ever. Republicans and Democrats alike. Oh, there was quite a debate about “earmarks” but nothing was essentially done. We make jokes about such silliness as funding a $1.5MM study as to why overweight lesbians are overweight but this kind of silliness continues. Big Red Car thinks that if you had taken a cross section of those folks out for a nice dinner — take them to Golden Corral they have a great salad bar — and posed the question to them directly they would have likely said: “Hmmm, because we eat too much?” Would have cost how much?

6. The President and the Senate have completely abrogated their legal duty to prepare and submit a budget — the President being required to submit his budget in February by law. He would not likely miss the opportunity to give a State of the Union presentation — which for the record can be submitted in writing and does not require a joint meeting of Congress — so why has he routinely missed the legal deadline to submit a budget? Short answer — he does not GAS.

7. Both parties start out with absurd and impractical opening bids — the President is not going to repeal Obamacare, Congressman Ryan. Not going to happen. Why put that into a budget proposal? It simply wastes time.

8. The people are not paying attention. The markets — NYSE at all time high, folks — do not care. The Republicans will always fold. The brinksmanship is not working and it is all wasting time and energy. Nobody actually believes the Congress can solve the problem.

Entitlements

We already know exactly what is going to happen with entitlements and nobody has the real courage to do anything. Entitlements are the elephant in the room.

1. The general fund of the US has been stealing from Social Security for decades and the intra-governmental IOUs which have been issued by one arm of the government to the other (the mythical Social Security lock box) are worthless and will never be cashed. They will reneged on and waffled out of and generally ignored.

2. Everything will stay the same for folks over 55. Nobody who votes will be impacted.

3. The eligibility age will be increased to 68-70 years old.

4. Everything will be means tested and those with means will get nothing regardless of how long or how much they have paid into the system.

5. Private insurers — Medicare — will be allowed to compete with the system like a good head fake.

6. The government will continue to issue mandates — Doc Fix anyone — that will drive the best physicians out of the system. They will simply stop treating Medicare patients leaving the Medicare patient with inferior care.

7. Young folks will be able to opt out — keep paying a portion of their payroll taxes while the employer pays a full tax complement for those who opt out — until Medicare simply disappears.

Courage

You could not fill a thimble half way with the amount of courage that is available — let alone actually being used — in Washington. Until somebody shows up with the courage to deal with this — which the Simpson-Bowles Commission did in fact do — nothing is going to happen. Nothing.

But, hey, what the Hell do I know anyway? I’m just a Big Red Car and a Big Red Car only runs on gasoline — not deficit fumes. Haha, Big Red Car, you crack me up.

I agree with you more than you agree with the Boss. It’s not just the courage of the legislators-but the courage of their constituents as well. They live in fear of “what if”. What if we actually cut govt spending? What if….

The constituents in many cases believe the backward economics they were taught in school. Keynes only works on the blackboard. Classical economics is the way to go. They don’t have faith in themselves to accept responsibility for the consequences of their decisions-or they are risk averse-or even worse-they think the government and society owes them a lifestyle.

The courage of the politicians mimic the courage of their constituencies,